The Minimum-Wage Debate in Charts

Over at our Daily Comment blog, I’ve posted a piece about President Obama’s proposal to raise the minimum wage from $7.25 to $9.00. (You won’t be surprised to find out that I’m in favor of it.) For anybody interested in the debate about the impact of minimum-wage laws, here are three of the charts I referred to.

The first one, courtesy of CNNMoney, shows the nominal and inflation-adjusted values of the minimum wage going back to 1938, when it came into effect at $0.25 an hour. The most notable thing about it is how the real value was raised sharply in the nineteen-fifties and sixties, then cut sharply in the seventies and eighties.

The second chart shows the unemployment rate going back to 1948. If there was a strong relationship between the minimum wage and over-all employment, the unemployment rate would have risen during the nineteen-sixties and fell back during the nineteen-seventies and eighties. In fact, the reverse happened.

Finally, courtesy of Business Insider, here is a table showing how the U.S. minimum wage compares to its European counterparts. As you can see, the U.S. is in the middle of the pack. The minimum wage here is quite a bit lower than it is many leading economies, such as Canada, France, and the United Kingdom.